By Reuters
STOCKHOLM, May 19 (Reuters) – Artificial intelligence has not yet penetrated the labour market and productivity enough to affect Swedish monetary policy, but developments are moving at a rapid pace, Riksbank Deputy Governor Aino Bunge said on Tuesday.
AI can drive policy rates up or down, Bunge said in a speech.
She told a conference she believes AI will change the economy in many ways, but that the effects are uncertain depending on when they come in time.
“There are opposing forces working against each other,” she said. “It is productivity and efficiency, it is an increased need for investment, but it is also an increased prosperity.”
She said an AI-related upturn in productivity growth would push up the neutral interest rate, and that could argue in favour of a higher policy rate over time.
The Riksbank this month kept its policy rate unchanged and said the risk of higher inflation had increased somewhat due to the war in the Middle East.
Bunge said on Tuesday higher oil, gas, jet fuel and fertiliser prices due to the war would push up Swedish inflation, but on the other hand inflation is currently low and the economy is in a good starting position.
“The risks increase the longer the war continues, but I believe there is little to gain by responding pre-emptively to the supply shocks we are currently observing,” she said of the current monetary policy.—Reuters
